Prime rents for UK industrial outdoor storage (IOS) assets have risen by 36% over the past two years, according to new research from Knight Frank.

London and the South East has led rental growth, recording a 42% uplift over the past 24 months to £5.45/sq ft.

In the regions, IOS rents increased 31% between Q2 2023 and Q2 2025. Wales has seen a 15.9% prime rental uplift year-on-year, followed by the Midlands, which saw a 9.7% uplift, and Scotland, which recorded a 6.3% rise.

The average required IOS site size has also risen by 36% in London and the South East over the past 18 months – from 2.3 acres to 3.1 acres.

James Clark, partner, industrial and logistics capital markets at Knight Frank, said: “For investors, IOS provides a capex-light path to income growth, with short delivery timeframes, depth of occupier demand, and the potential for upside – from modest site upgrades or future redevelopment. Specialist funds are building platforms to aggregate sites in what is a fragmented market, identifying opportunities where they can professionalise operations, standardise leases, capture scale efficiencies, and compress yields on exit.

“They’re targeting infill and port-proximate sites on major corridors, aggregating small, under-managed plots into institutional portfolios with consistent ESG, safety and operational standards. With tight land supply and resilient end-user demand, we see the sector offering durable rental growth and an attractive risk-adjusted return profile, particularly for investors comfortable executing light infrastructure value-add.”

Deirdre O’Reilly, associate, Knight Frank commercial insight, added: “IOS is attracting new and larger entrants every year, with demand not only sustained but evolving to reflect the UK’s growing reliance on freight movement, supply chain resilience and increased storage requirements for businesses. Importantly, as the UK logistics sector accelerates toward net zero, demand for flexible IOS land to host EV infrastructure and zero emission fleet operations is expected to intensify.

“IOS has also emerged as a particularly attractive sub-sector among investors, with sites being repositioned as low CAPEX, low OPEX, yield-generating land investments that offer returns comparable to the broader industrial and logistics market, and which benefit from similar occupational growth drivers. We expect to see continued inflows of capital and new players seeking exposure to this niche but maturing asset class.”